Hidden Energy Costs Richard Perez Commercial electric power costs about 7.75¢ per kiloWatt-hour, and gasoline costs around $1.10 per gallon at the pump. These are the prices we pay for energy, or are they? I always figured that the true cost of energy was higher than this because the societal and environmental consequences of energy use are not included in these costs. The American Solar Energy Society (ASES), in its publication "1989 ASES Roundtable: Societal Costs of Energy", has quantified many of the hidden costs in our energy bill. This information is very revealing- it shows we are paying far more than we might think. What is a "Hidden Cost" When we pay the power company's electric bill or fill up our car's tank, we pay a specific price for the energy we directly consume. What we also pay, sooner or later, are many hidden costs associated with our energy usage. For example, I quote Michael Nicklas in the ASES report. "Our free market economy operates best when both the buyer and the seller have complete knowledge of which choice will benefit them the most. With energy , this is obviously not the case. How many people know that sulfur dioxide from just our coal burning plants is costing Americans $82 billion per year in additional health costs? How many farmers are aware that they are annually losing $7.5 billion per year due to reduced crop yields caused by air pollution? And, how many people are really aware that nuclear waste and decommissioning costs (which, for the most part, we have not seen yet) are the equivalent of $31 billion per year?" Quantifying Hidden Costs Michael Nicklas and the ASES has done a well documented study of the hidden costs of energy. This table was compiled from their data. INSERT TABLE This table shows each hidden cost classification, its estimated minimum cost, its estimated maximum cost, its estimated average cost (the average of the preceding two categories), and the estimated average cost per person living in America. This last amount is figured by dividing the average cost by the 250 million folks living in the US. The estimated average hidden cost per classification is presented graphically in the chart to the right. INSERT CHART What is really shocking is that we are actually paying between 109 billion and 260 billion dollars yearly in hidden energy costs. In terms of an individual, each of us is paying over $740 yearly in hidden energy costs. Let's look at each hidden cost classification, starting with the potentially most expensive- our health. Health Impact The major health impacts are caused by our combustion of fossil fuels. Here the information is far from complete and the maximum estimate is, in my opinion, most certainly low. This estimate is based on the combustion of low sulfur coal and the resultant sulfur dioxide pollution (which eventually winds up as acid rain). Ron White of the American Lung Association estimates that if the new Environmental Protection Agency (EPA) standards regarding sulfur dioxide emissions are adopted, Americans would save 82 billion dollars in health cost yearly. And this is just from cleaning up coal burning plants. The health costs of automobile emissions and nuclear waste/accidents are not included in this total. The problem is really much greater. Who can really put a price on disease and pain? State and Federal Energy Subsidies Government heavily subsidies the energy industries. The table and chart below show the depth of government financial involvement in energy. It is interesting to note that the energy technologies with the worst health and environmental impacts receive the most government money. The worst polluters, nuclear and combustion technologies, receive 90% of the government money. The renewable energy technologies, which offer little or no side effects, receive the least government support. Solar technologies (both PV and thermal together) receive only 3% of the government money. At the bottom of the list is conservation with 2% of the subsidy dollars. This is amazing since conservation offers immediate relief from our energy problems, is easily implemented, and has no environmental side effects. Something is radically wrong hereÉ INSERT SUBSIDY CHART Military Our dependence on imported oil requires that our military keep the international supply lines open. The U.S. military is spending between 14.6 and 54 billion dollars yearly just defending the oil supplies coming from the Persian Gulf. On the low side, the National Defense Council places the Persian Gulf military cost at 14.6 billion. On the high side, the estimate of 54 billion is made by the Rocky Mtn. Institute. Retired Secretary of the Navy, John Lehman was quoted in Newsweek Magazine as estimating the Persian Gulf military cost at 40 billion dollars yearly. And these cost estimates only concern the Persian Gulf. There are also other hidden national security costs. One of these is military aid to oil producing nations. Another is diplomatic and foreign policy decisions made on the basis of imported oil. Employment The National Defense Council Foundation estimates the annual cost of lost U.S. employment at 30.6 billion dollars yearly in their report "The Hidden Cost of Imported Oil". Radioactive Waste The major problem associated with nuclear fission power is, "What do we do with the leftovers?" To date, no one has a viable solution to the thousands of pounds of radioactive waste we generate from nuclear power plants. This problem is made more severe because it is a long term problem. For example, plutonium (Pu239) has a radioactive half-life of 24,400 years and is environmentally dangerous for over 100,000 years. We are making nuclear decisions now that will affect our planet, and all lifeforms on it, for millennia in the future. The Electric Power Research Institute (EPRI Journal, July/August 1985) estimates that it will cost 195 million dollars to decommission a nuclear powerplant. The World Watch Institute estimates the disposal costs of nuclear waste at between 1.44 and 8.61 billion dollars per year. Radioactive waste disposal isn't actually disposal, but containment. We have to responsibly ride herd on high level waste for thousands of years. We now have no method of actually disposing of high level waste. We simply store it and hope our children can figure out a safe way to deal with it. This estimate doesn't include the cost of nuclear "accidents". What does a "Three Mile Island" cost to clean up? Crop Loss The EPA reported in 1988 that ozone pollution alone is reducing crop yields by up to 12% yearly, and that's about 3 billion dollars annually. Boyce Thompson of the Institute for Plant Research at Cornell University has revised this estimate to a 30% crop loss yearly with an annual price tag of 7 billion dollars. And these estimates do not include crop losses due to global warming, acid rain, and other energy related forms of air/water pollution. Corrosion The primary component involved in corrosion is acid rain. Acid rain is caused by the sulfur dioxide produced by coal burning powerplants. It is estimated that the damage to metal buildings alone amounts to about 2 billion dollars yearly. Global Warming Global warming, resulting from our mania for combustion, will not be plainly apparent for at least a decade. And this is the really scary part- it can damage our planet before we know that it is happening. By the time global warming becomes a hard, measurable scientific fact, it will be almost impossible to do anything about it. Once again, how we produce and use energy today determines the kind of world our children will inhabit. The Problem The main problem isn't that we use power, but how we make it. As long as we continue to produce our power primarily by combustion or nuclear reactions, we are going to have the problems, the environmental effects, and the costs detailed here. What we need are energy sources that are renewable and non-polluting. Forty years ago, this was a dream. Now renewable energy devices are a reality. So what can I do about it? I urge you write your elected representatives and let them know how you feel about energy issues. Encourage government to support renewable, non-polluting, energy technologies. This is the long, slow path. Our government agencies have access to the information presented here- they know what's going on. What they don't know is how YOU feel about it. Let your elected officials know that you consider energy a political issue. Ask them what they are doing to help solve our energy related problems. Let them know that when you cast your vote, you will have energy on your mind. Conservation can be practiced by everyone. Whether you make your own power or buy it from the grid, conservation saves energy. Implement conservation techniques in your home. Install efficient lighting. Turn off unused appliances. Find and isolate those "phantom loads". When you buy an appliance make efficiency your prime criteria. If each of us practices conservation, then I estimate we could reduce America's electric bill to half. And this means half the environmental damage. Conservation offers immediate, short term, relief until we can mass implement non- polluting renewable energy sources. Perhaps the best thing any of us can do as individuals is to actually use renewable energy sources. And the best place to start is at home. Every time any one of us puts up a PV panel, a hydro turbine or a wind generator we are directly helping solve America's energy problems. Every time a renewable energy source is used, then power that would have been produced by combustion or nuclear reaction is instead made by clean renewable methods. It's not often we get a real chance to change this world and stay at home at the same time. Put up a PV panel, develop that creek, put that wind machine up! Show the World that there are alternatives to life in a polluted greenhouse! Access Copies of the entire "1989 ASES Roundtable: Societal Costs of Energy" can be purchased for $20. from the American Solar Energy Society, 2400 Central Ave., B-1, Boulder, CO 80301. I want to thank the American Solar Energy Society for letting me use the data they have collected. This report contains much more data than I have discussed here. The opinions expressed here are mine and do not necessarily represent the views of the American Solar Energy Society.